Beni Stabili: 9-month 2017 rents

Beni Stabili: 9-month 2017 rents Full go towards year end

Milan: October 24th, 2017

Growthinoperatingmetrics1.5% L-f-L rental growth excl. TI assets 95.5% financial occupancy 93.1% excluding TI portfolio (+5.7 pts vs Dec 2015)	Remarkable letting activity Overall, ~111,000 sqm of letting activity YTD for approx. €22 m annualized rents
Strengthening of financial profile July: Investment grade rating by S&P ("BBB-" long-term corporate credit rating with a stable outlook) October: 1strated unsecured bond, € 300 million 1.625% 7 Years Upcoming 2018 maturities already secured and 2019 debt due reduced by half

OPERATING HIGHLIGHTS FOR 9-MONTH 2017 ACTIVITY

Successful rental activity resulting in an increased occupancy rate

• 28 new contracts for€3.1 million annualizedrents;20 renewals for€15.0 million annualizedrents;6 prelettings for€4.2 million annualizedrents;

• Occupancy rate is 95.5% group share on total portfolio and 93.1% excluding TI portfolio (+5.7 points vs. Dec. 2015);

• Weightedaverage maturity of lease agreements tofirstbreak-optionof7.4 years in group share;

• Committeddevelopmentpipelineis59%pre-letbringingaround€11millionannualizedrents.Investment and capex funded through targeted disposals of mature and non strategic assets

• Totaldisposalsagreementsofaround€8351million with 5.8% gross exit yield:
  • Disposal of a 40% stake in the SICAF (Central SICAF) completedin2Q2017,equivalenttoapprox.

    €618 million of assets sale;

  • €2172million of additional disposals agreements, of which € 192 million already cashed in;

• €194 million acquisitions mainly in Milan with 6% gross potential yield, including the announced €118 million acquisition of Credito Valtellinese Group's portfolio in the context of a sale and leaseback transaction

• €59millionofcapexaccruedinthe9monthsgroupshare.Active financing activity for a stronger debt profile

• Achievement of an investment grade rating with S&P in July 2017 (BBB- with stable outlook)

• Successful liability management:

  >February 2017: Buy-back of €270m 2.625% convertible bond due in 2019

  >July-August 2017: €335m long-term secured financing with more than 8.5 years of maturity

  >October 2017: Issue of €300m first unsecured rated bond with 7-year maturity and 1.625% coupon (115bps margin above swap rate)

  * * * * *

  9M2017 Rental Income: €141.7 million3

  The gross rental income amounts to €141.7 million in 3Q 2017 (€149.0 million in 3Q 2016). This change is primarily due to the following main events:

  �+€5.6 million increase due to acquisition of properties;

  �-€13.8 million reduction due to disposals (of which €10.6 million related to the 40% stake in the SICAF disposal)

  �+€3.1 million net impact from rental activities;

  �-€2.0 million impact from releases of properties;

  �-€0.2 million other non-recurring impacts.

  1Including a binding offer under condition precedent (€9.5 million)

  2€223 million consolidated

  3Group share: calculation includes rental income from Telecom Italia assets at 60% (BS ownership in Central Sicaf) from June 2017- (consolidated data:

  €152.4 million)

  Onthelike-for-like basis,thegrossaccountingrents increase by +0.9%4(+1.5% excluding Telecom Italia portfolio).

  Group Share

  (€million)9M20169M2017 Change(%) Like-for-Like

  Occupancy rate5

  Office TI	74.2	63.3	+0.2%	100.0%
  Office Non - TI	59.8	64.6	+1.8%	92.8%
  Total Office	134.0	127.9	+1.0%	95.6%
  Retail&others	15.0	13.7	+0.0%	94.8%
  Development	0.1	0.2	n.a	n.a
  Total portfolio	149.0	141.7	+0.9%	95.5%
  Total portfolio (exc. TI)	74.8	78.5	+1.5%	93.1%

  RENTAL ACTIVITY

  Active rental activity and a stabilized occupancy rate

  The financial occupancy rate on group share portfolio (excluding Development) moved to 95.5% (stable from 95.5% at December 31, 2016). Total portfolio group share occupancy is impacted by the sale in June 2017 of 40% of TI portfolio, completely offset by the increase in occupancy on non-TI portfolio (96.3% total portfolio occupancy on consolidated basis as at 30/09/2017).

  The occupancy rate excluding Telecom Italia portfolio is 93.1% compared to 91.6% at the end of 2016 and to 87.4% at the end of 2015. This increase is strictly linked to an active rental activity. In particular, in 3Q 2017 Beni Stabili executed:

• 28 new contracts for 14,600 sqm and an annual rental value of €3.1 million;

• 20 renewals for 83,900 sqm and an annual rental value of €15.0 million.

  Beni Stabili has also signed 6 preletting agreements on development projects for a total of 12,800 sqm and

  €4.2 million annualized rent.

  Main lease transactions can be summarized as follows:

• Via Cernaia, Milan: pre-let contract for the whole building with Amundi for €3.1 million and a ~9 years firm maturity (+6 yrs); 8,300 sqm

• Via Montebello, Milan: renewal of the lease contract at passing rent with Intesa for €7.6 million and a 9 year firm maturity (+6 yrs); 18,426 sqm

• Symbiosis, Milan: new contract for €0.55 million and a 12.5 years firm maturity (+6 yrs);

• Via Colonna, Milan: new contracts for €0.6 million and a 7 years firm maturity (+6 yrs);

• Via Scarsellini, Milan: new contract for €0.7 million and a 7 years firm maturity (+6 yrs).

• Via Lugaro, Turin: renewal of a lease contract for € 1.3 million and a 7 years firm maturity (+6 yrs).

  4The like-for-like rental growth is calculated on the stabilized portfolio as the growth rate coming from i) the effect of indexation to inflation; ii) the effect of an increase or reduction in the vacancy rate of the stabilized portfolio and iii) the effect of renegotiating expiring rents or of new rents. The stabilized portfolio is the portfolio adjusted by sales, acquisitions and development.

  5Occupancy as at 30/09/2017 includes already the effect of sale of assets under preliminary agreements (+0.4% effect on portfolio excluding TI assets already included, +0.3% effect on total portfolio).

  The average maturity of lease agreements considering break options moved to 7.4 years group share6.

  REAL ESTATE PORTFOLIO

  Value creation and improvement of portfolio quality through asset rotation

  Following the communicated strategic targets to improve operating performance and portfolio quality, Beni Stabili has launched a specific asset management plan which is rapidly progressing to re-position its portfolio on "Milan green offices".

  Disposal agreements: €835 million of properties at a 5.8% gross exit yield

  During the period Beni Stabili sold 40% stake in Central SICAF, equivalent to approx. €618 million of assets (6.3% exit yield).

  In addition, Beni Stabili completed the sale of 7 assets for a value of €191.5 million, in line with book value. As of September 30th2017 the company has disposal preliminary agreements in place for approx. €25.77million, at a price in line with book value.

  Acquisitions: €194 million at 6% potential gross yield DuringtheperiodBeniStabilipurchased:

• Credito Valtellinese Group Portfolio: 17 assets for a total amount of € 117.8 million and 6% gross yield; the two properties (€19.2 million) subject to a pre-emption right in favor of the Italian Cultural Heritage authorities have been fully purchased by Beni Stabili on September 2017 following the decision of the authorities not to exercise the option;

• Milan, via Principe Amedeo for a price of €41.9 million and a potential yield of 5.2%; the asset will be completely refurbished;

• Milan, via Marostica for a price of €24.7 million and a 6.9% yield.

Focus on development pipeline

Beni Stabili has significantly grown its development pipeline since end-2015 and can today leverage on a

€792 million pipeline encompassing €68.8 million capex8to be spent on committed projects (approx. 75% related to Milan properties) as well as circa €460 million managed projects in Milan.

The main committed project in the pipeline is Symbiosis (building A+B). In July 2016, Beni Stabili signed a preletting agreement with Fastweb, the largest alternative fixed-line TLC provider in Italy part of the Swisscom Group, covering 16,000 sqm of office areas (and 266 covered parkings). Furthermore, during 1H 2017, Beni Stabili signed an additional pre-let contract with CIR Food, an Italian leading food service company, for the lease of 1,015 sqm of restaurant area on the ground floor. With this signing, Beni Stabili took the asset occupancy to 85%. Works on the pre-let building started in summer 2016 and are well-advanced for a planned completion in 4Q 2018. This €92 million project is expected to deliver a 7.1% yield on cost.

Alongside the Symbiosis project in Milan, the complete refurbishment/repositioning projects in Beni Stabili's development pipeline as at September 2017 are:

67.2 years as at 30/06/2017, including leases renewed on July 2017. WALB as at 30 June 2017 was 6.9 yrs.

7Including a binding offer under condition precedent

8Includes construction costs, technical costs, urbanization fees, capitalised financial costs, home technical costs and various fees.